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Statoil signs LOI with Sembcorp for hull construction for Johan Castberg FPSO vessel

Statoil has signed a letter of intent (LOI) with Sembcorp Marine Rigs & Floaters for the construction of hull for the floating production, storage and offloading (FPSO) vessel to be located in the Johan Castberg field in the Barents Sea.

The contract is slated to be signed at the final investment decision to be taken by Statoil and its partners next month. The contract is worth $490m and also includes construction of integrated living quarters for the vessel. 

Sembcorp Marine Rigs & Floaters is a subsidiary of Singapore-based shipbuilding company Sembcorp Marine.

According to Statoil, the hull construction is a major time-critical delivery for the project completion. The Johan Castberg project, which will have an operating life of 30 years, is scheduled to be brought on stream in 2022.

Statoil chief procurement officer Pål Eitrheim said: “We will be working closely with Sembcorp Marine to ensure safe and efficient delivery based on our requirements for HSE, quality, time and cost. 

“The remaining procurement work will be progressed in parallel with this.”

Estimated to hold 400-650 million barrels of proven volumes of oil, the Johan Castberg field comprises discoveries by Statoil in Skrugard in 2011, Havis in 2012 and followed up by Drivis in 2014.

Statoil project development senior vice president Torger Rød said: “Johan Castberg is the next major field development on the Norwegian continental shelf and important to future infrastructure in the Barents Sea.

“Analyses from Agenda Kaupang show that the project will generate some 47,000 man-years of employment in Norway in the development phase from 2018-2022 given a competitive Norwegian supply industry.”

Statoil has a stake of 50% in the Johan Castberg field which is located in PL 532, around 100km north of the Snøhvit-field. Other partners in the field are Eni with 30% stake and Petoro with 20% stake.

Image: Illustration of the Johan Castberg floating production vessel. Photo: courtesy of Statoil ASA.